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CNN IN THE MONEY
Sprint, Nextel Merge; Bush Administrtion Continues Search For "Flawless" Candidates For Cabinet Openings
Aired December 18, 2004 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR, IN THE MONEY: See how mergers are changing the companies that keep us all connected.
Plus, a little too available. We'll look at whether gadgets like cell phones are more trouble than they're worth. Why yes, Virginia, they are. All that and more right after this quick check of the headlines.
FREDRICKA WHITFIELD, CNN CORRESPONDENT: An investigative hearing was held in Baghdad for Ali Hassan al-Majid, better know as Chemical Ali and the former defense minister for Saddam Hussein was also at the hearing, which was not part of the upcoming trials for former Iraqi officials. Al Majid is expected to be the first former Iraqi official to go on trial, which could happen this month.
Four suspected Islamic militants are expected to arrive in Madrid today. One of them is thought to have been involved in the March train bombings. The four were arrested in the Canary Islands, suspected of trying to set up a logistical base. The Madrid blasts killed 191 people.
Police say a baby girl is recovering after being cut out of her mother's womb. The mother was found dead in her Missouri home. Authorities say a Kansas woman who had a miscarriage earlier this year had confessed to strangling the pregnant woman and then cutting out the baby.
89-year-old Augusto Pinochet, one time dictator of Chile, was taken to an Army hospital today after suffering a stroke this morning. A day earlier, an appeals court postponed a decision on whether to uphold his indictment and house arrest on kidnap and murder charges, connects to his brutal regime.
I'm Fredricka Whitfield at the CNN center in Atlanta. More news at the bottom of the hour. Time now for IN THE MONEY.
ANNOUNCER: From New York City America's financial capital, this is IN THE MONEY.
CAFFERTY: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, searching for a spotless record. President Bush putting his new cabinet together for a second term. The nominees are under some tough scrutiny. See if the hurdles they face might be too high for America's own good.
Plus, hot numbers. As Sprint and Nextel pair off, we'll look at how corporate hook ups are changing the world of wireless.
And the electronic leash from portable e-mail to cell phones. We're joined at the hip with our gadgets. Find out whether it's time to take a break from all that technology. Joining me today a couple of our IN THE MONEY veterans, CNN correspondent Susan Lisovicz, money.com managing editor Allen Wastler.
More bad news for one of the big PHARMA companies last Friday. Celebrex, apparently in one long-term study, has been found to possibly cause some kind of heart difficulties. The stock of Pfizer, the big company that makes it, right off the table in early trading on Friday. What's going on?
SUSAN LISOVICZ, CNN CORRESPONDENT: Clearly, I think we're going to have to look at the approval process, which I have long thought was the best in the world, but it says a lot of bad things about two very popular pain killers, right? We have an aging population and we have a population that's disposed to taking pain killers. We're not into homeopathic...
CAFFERTY: No we're not.
LISOVICZ: ... natural types of medicines. And these are two very, very popular pain killers and I'm sure they're going to go off the shelves pretty soon.
ALLEN WASTLER, MONEY.COM: I was a little bit surprised by the market's reaction because you would think after the whole Vioxx episode, Cox 2 inhibitors and all that whole class of medication, that they would have sort of built into the stock price a little bit about well, there might be some more studies coming down the pike and a lot of these things are a lot alike. Maybe we'll build a little risk into it.
CAFFERTY: The other question is, where is the FDA on this stuff? There's a lot of concern about the relationship between big pharmaceutical companies and the Federal government. They lobby heavily. They spend millions and millions of dollars to influence legislation and rules and regulations and the FDA is the recipient of some of that largesse and they're the ones charged with issuing the OKs on this stuff. I got a question.
LISOVICZ: I think that a lot of people have questions and I think you're going to be seeing it take front and center pretty soon.
CAFFERTY: By now, President Bush has named his picks for just about all of his new top cabinet positions for the second term. If there is one thing harder than getting one of those posts, it might be getting past the background check. The vetting process isn't just to look at your past. It's more like the bureaucratic version of a body cavity search if you know what I'm saying.
For some insights into the process whether the hurdles might be a little too high, we're joined by Paul Light, who's a senior fellow at the Brookings Institution and director of the Center for Public Service. Paul, nice to have you with us. Thanks. PAUL LIGHT, BROOKINGS INST.: Nice to be with you.
CAFFERTY: So what went wrong with the nominee for secretary of homeland security? I mean, I have, in all the years of covering politics and reporting on news out of Washington, this is as big a nightmare as I've ever seen. What an embarrassment.
LIGHT: Well, the big failing here was that the candidate had violated the laws that he was about to administer and that's absolutely a no-go. You can't get through this process if you're not able to follow the laws. That's part of the, sort of, basic requirement. There were other things in his background that would have created trouble, political trouble for the Bush administration. But it was the failure to pay back taxes and the employment of an illegal immigrant that sunk his nomination.
But who made the mistake here? Was it the White House jumping the gun on announcing Bernard Kerik was their man, or was it Bernard Kerik for not maybe being as up-front as he should have been with the authorities when they talked to him about taking this job?
LIGHT: It's all of the above. Bernie Kerik did not take that good, hard look in the mirror and say, you know, is there anything about my past that I don't want on the front pages or on CNN? The White House moved very quickly largely, I think, on the basis of the endorsement from Mayor Giuliani, also on the basis of the president's great affection for Bernie Kerik. Everybody failed in this particular case. The White House did not do a full and thorough vetting, and Bernie Kerik did not tell himself the truth.
LISOVICZ: That seems to be an understatement, because nanny-gate seemed to be just the tip of the ice berg. I mean there were back taxes on a New Jersey condominium. There are ties to a company that is linked to organized crime. There are -- there was a big order, maybe $200,000 worth of doors by a company where Mr. Kerik was a highly paid consultant. And then we didn't even get into his personal life. You could Google this and find this out. Why is this such -- how could it fail so spectacularly?
Well, I think you're quite right. Even a cursory search of the Internet or a Nexus search on background on Bernie Kerik would have revealed a lot of these problems. Part of the problem in the White House was that Alberto Gonzalez is headed over to Justice and the White House counsel's office is in a bit of turmoil. They're responsible for this early vetting. I think Kerik's nomination was sinking fast. To a certain extent, the White House is lucky that he pulled out when he did, that we had such a clear case where he had to pull out.
WASTLER: Professor, I sort of think that Kerik actually might have been a decent homeland security chief, all the problems aside. And I think many of the nominees that have gone down in this vetting process, revelations sort of thing, actually would have been halfway decent. I doubt if our founding fathers would have gotten through a vetting process like it is today. So are we setting it too high and what do we need to do to sort of change that? LIGHT: It's a brutal process. Bernie Kerik's case is a little bit unusual in that he had so much going on, but for the sort of kind of talented CEO or the head of a large university, the kinds of people that we really want, Lord knows, even scholars at think tanks, this process is just brutal. The financial disclosure is intense and difficult. Many nominees report that they have to spend 10, 15, 20 thousand dollars out of pocket just to fill out the forms. The FBI field investigation is one of the nastiest, most time delayed processes that you can invent with all sorts of irrelevant information. We ask candidates about their short trips to Canada and Mexico. We ask them about the birth dates and birth places of their parents and in-laws. We ask them for the name of a high school classmate who can vouch for their character. I mean it's ridiculous.
CAFFERTY: Is some of that a throwback to the McCarthy era and the witch hunts for the communists in our country and all that stuff?
LIGHT: Absolutely. It's like any kind of red tape in government. You keep adding and adding and adding and you never subtract.
CAFFERTY: What do we do about it so that we don't set up a situation where a bad person could fall through the cracks and wind up in a position that we didn't want them in? How do you change the way things are?
LIGHT: The White House and the United States Senate have to sit down together and figure out a way to streamline this process. It's gotten so bad now that the average delay from the beginning of a new term to the completion of the full nominating process for all of the cabinet and sub cabinet members is now about 8 1/2 months. You talk about Celebrex earlier and Vioxx and the drug problems at FDA, all of the top positions at FDA are currently vacant. We can't find people to fill the positions and that's a sure sign of difficulty in the process.
CAFFERTY: We're going to have to leave it there. Paul Light, thank you for joining us. Appreciate your input.
CAFFERTY: He's a senior fellow at the Brookings Institution, professor at the Center for Public Service, New York University. When we come back on IN THE MONEY, ring out the old as Nextel and Spring hook up. We'll see how the roster of players in the cell phone business is changing.
And all thumbs. Remote e-mail devices like the Blackberry keep you connected all the time. We're going to take a look at whether that's a good thing or not.
LISOVICZ: Another mega merger in the world of wireless. Sprint and Nextel Communications are hooking up in a $36 billion deal announced this week. The combined company, which will be called Sprint/Nextel, will have 35 million subscribers, making it the number three carrier. Wall Street seemed to approve of the match anyway. Shares of Sprint have been on a steady climb over the past year, while shares of Nextel are hovering around their 52-week highs and that makes Sprint and Nextel our stocks, plural, of the week. I guess it's really not surprising you're going to have this kind of action in wireless, when the companies are constantly trying to upgrade their networks and technology and then you have the fierce competition. Remember, this combined company is still a distant number three.
CAFFERTY: Behind Verizon and Cingular.
LISOVICZ: Verizon and Cingular.
CAFFERTY: What about any regulatory issues with this deal at all?
LISOVICZ: Not that I know of, just because one of the reasons why is because it's still such a distant number three.
WASTLER: You still have a lot of competitors and so people aren't really reading that. But if I was in either of these companies, I'd take my gains right now and I'd go running, screaming into the night and not go with it because Verizon and Cingular both got baby bell power behind them. They can offer customers one-stop shopping in a variety of different services. So that's one thing going for it. Also, whenever you have a giant merger of equals, you always got to worry about culture --
CAFFERTY: Family feud.
WASTLER: We know about that don't we?
CAFFERTY: And inevitably, there is a struggle for whose voice is going to be heard the most, even though in the beginning, they say it's a merger of equals and we're going to get along, well, they don't.
LISOVICZ: The other thing is that, you mention the baby bells. The baby bells have a far better credit rating than some of the smaller players and that makes a big difference because when you do mergers and when you're trying to spend a lot of money upgrading your networks, it costs money and of course that costs a lot more for borrowing.
CAFFERTY: What kind of pressure does this put on some of the smaller companies, like a T-Mobile for example? Are there going to be some other deals coming down the pike now because of these consolidations that are going on?
WASTLER: Probably but they need to scrounge, because all the good ones are taken.
LISOVICZ: Scrounge or scramble or what you may see is some of the biggest ones then try to do a deal of some sort.
CAFFERTY: Look forward to the boardroom fights and who winds up actually being the boss over there.
A lot of people think that the more connected you are, the more productive you are, which is one reason why so many of us are running around with things like cell phones, Blackberries and instant messaging, not all of us, but a lot of us. Your gadgets actually might make you less efficient and more stressed out. For more on that subject, we're joined by Michelle Conlin, who's the working life editor of "BusinessWeek" magazine. Michelle, I'm so happy to finally have someone on this program who agrees with me that you can live your life without all this technology. I don't have any of these things. I'm 62 and I'm kind of getting along all right. What's bad about all the high tech stuff everybody is a slave to these days?
MICHELLE CONLIN, BUSINESSWEEK: It's so counter intuitive, because you think you have these gadgets and they are making me so much more productive. I can call. I can text message from the airport. I can e- mail. But actually what researchers are finding, it's really fascinating. It's all in the way that you use them. For many people, because they multitask when they're using the gadgets, so they're checking an e-mail and talking on the phone and we all sort of know what that sounds like when someone's doing that, actually makes you less efficient. In fact, when you're trying to do more than one thing at the same time on these gadgets, it can take you up to twice as much time just to complete that one task. So the multitasking actually becomes multi-slacking. So that's one big problem with it. It gives you this faux sense of productivity often when really you're holding yourself back.
LISOVICZ: That instantaneous can be a downer. There's a real down side to it. Your article was so interesting and entertaining. You have this anecdote about Omer Wassau (ph) who was in a high level meeting, I would imagine that there were serious things being discussed and what happened Michelle?
CONLIN: And he has his hand-held as we all do now under the table, kind of checking it and he gets this urgent message and it says, "Nicole Kidman in Union Square with yoga mat right now." If only that was the only time that happened --
LISOVICZ: That's important, isn't it, Michelle, it's important to get that kind of information during a meeting, right?
CONLIN: I'm sure it is, but I think he felt at the time that it was just this colossal distraction and it really brought home to him and he's a gadget guy, but it brought home to him how he really needed to start to unplug.
WASTLER: Michelle if you look at the productivity stats over the past few years, you see a growing, growing amount of productivity and everybody sort of says, must be all the gadgets, must be the fact that we can multitask. So that sort of runs counter to what you're saying, doesn't it?
CONLIN: Well, in a sense it does in a sense, but I mean if you think back to every great technological innovation, I mean the telephone brought so many great productivity advances, but it was blamed for breaking up the family and even contributing to causing war. And the model T, for example, was blamed for making cows produce less milk, because they were so noisy. So every technological advance has its dark side and one of the dark sides with all these gadgets is that they can in fact make you less productive. They can be incredibly addictive. In fact there's a rehab in London now that actually admits people who are addicted to text messaging believe it or not.
CAFFERTY: Come on!
CONLIN: Actually, it's called the priory and I know it's probably...
LISOVICZ: You don't have it, Jack. You do not have it.
CONLIN: You're not in danger. You're not in danger.
CAFFERTY: What do you do about getting away from this stuff, because if you have all these things, then particularly employers who give you all this stuff want to be able to reach out and touch you day or night. I remember working at NBC years ago and they gave me a pager, which was back in the primitive Neolithic era of technology and I left it in my desk drawer and they would page me and the desk would make this noise. But I never took it with me and they got agitated at the fact that I didn't have this thing. Now if you have PDAs and cell phones and all this stuff and your boss wants you whether you're at home or on the road or whatever, he expects you to be there. Is there some way you can come to a way where you get a little break from this stuff?
CONLIN: I wish I had a great answer for that, but I think when you do unplug, people tend to get irate especially employers. But what happens is it makes it so that we're constantly ingesting more and more information so we have to work harder to keep on top of it.
LISOVICZ: I actually have to feel, I have to echo Jack's sentiments. I'm on the low tech side. Work offered me a Blackberry phone, but I could only make professional phone calls on it. I said that's OK, I'll keep my cell phone and then make work and personal calls on that. About a year ago, during a breaking news story, I was talking to a retail analyst and I asked her to give me her number. She gave me four numbers. She gave me her home, her office, and two cell phones, because one cell phone works in certain parts of the country. Another cell phone works in other parts of the country. It's just too much work. Where are we going with all this, Michelle? Do you see a happy ending?
CONLIN: Can you imagine checking four cell boxes? I can barely check two. Where we're going, a great way to find out where we're going is to look at places like Tokyo. It's a time machine, because they're always ahead of us technologically and we always tend to sort of follow in their footsteps. In Tokyo, they call these people the phone generation because they're constantly affixed to their phones and they've got that trance, they're talking into the air on the sidewalk. And so I think it's about at the end of the day, personal boundaries. I try to be very boundaried (ph) about it. I do have a cell phone, but I'm not interested in going too high tech, because I would end up spending more time trying to figure out how to use the thing. There's always sort of a backlash where people realize they're kind of overdoing it and perhaps at some point, we'll get there. But if you look at Tokyo, it just gets kind of more and more ridiculous.
CAFFERTY: Indeed. I set my boundary at zero, absolute zero. I have none of the above, will never use any of the above and I'm getting along all right, so far. Michelle, thank you. It's good to have you with us. Michelle Conlin is the working life editor of "BusinessWeek" magazine.
Coming up next on IN THE MONEY, time to hear from you as we read some of your e-mails from the last week. You can send us an e-mail right now, use your little PDA situation. Get out your thumb. Put it to work. We're at email@example.com.
CAFFERTY: Time now to read your answers to our question about changing Social Security. Ralph wrote this, Social Security should not be touched. If it's not broken, don't fix it. If anything, we should be promoting the present system and trying to improve it.
Shirley from Arizona weighed in with this. Yes, I do think the government should make changes in Social Security. They should keep their grubby mitts off the money that they are now using for every project under the sun and let it go for what it's intended.
And finally Johnny wrote to us from Detroit with this. I think Social Security benefits should never be changed because it's not fair to many millions of people who have been working most of their lives or have worked long enough to be eligible for benefits.
Time now for next week's e-mail question of the week, which is this. In the long run, do all those tech gadgets help you or hurt you? Send your answers to firstname.lastname@example.org. And you should visit our show page at money.com/inthemoney to check out what's coming up on our next program.
At this point we will thank you for joining us for this edition, pint sized though it is of IN THE MONEY. My thanks to CNN correspondent Susan Lisovicz, money.com managing editor Allen Wastler. Stay tuned now for a special presentation of global business influentials coming up next.
FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello, I'm Fredericka Whitfield in Atlanta. More of IN THE MONEY after a check of these top stories. Sources say police arrested three more people in the $10 million arson fire in an upscale neighborhood outside of Washington, D.C. A total of 45 homes were damaged. One man, a security guard who worked at the subdivision, is already charged.
A hearing for the former Iraqi regime figure known as Chemical Ali, he's accused of gassing Kurds back in the 1980s. The judge told reporters the hearing was not related to Chemical Ali's trial, which is expected to start soon.
Missouri police are holding a suspect today in the grizzly murder of Bobbi Joe Stinnett (ph). She was strangled and her fetus cut from her body at her home. They say a Kansas woman who recently miscarried admitted to the crime. The baby girl, who was almost full term, has been found and is in the hospital doing fine, apparently.
The FDA says it will review data that indicates the pain killer Celebrex can raise the risk of heart attacks. For now, the FDA says patients should consider alternate drugs or a low dose of Celebrex. Pfizer, the drug's manufacturer, says it has no plans to remove Celebrex from the market.
I'll have all the top stories at the top of the hour. Now, back to more of IN THE MONEY.
SUSAN LISOVICZ, CNN CORRESPONDENT: The rock in the marketplace rolling over the competition and reshaping your world. They've got money, power and vision. They are the global business influentials.
Coming up, so long slow lane. Ann Fudge bailed out of marketing to take a break and then Madison Avenue came calling. We'll check out her new gig, firing up a legendary ad agency.
Plus, the hottest company you've never heard of. Vivek Paul is the boss of Wipro. You've probably been on the phone with his workers. See how he connected American companies with Indian talent.
And the king of bling, Sean Combs started as a rapper but today he's running an empire that ranges from fashion to politics. Find out how he did it.
Over the next 30 minutes, we'll introduce you to some of the people changing your world through the companies they run. We call them the global business influentials. First up, Ann Fudge. She came to an ad agency that was resting on its laurels and helped it remember what it feels like to win.
LISOVICZ: You've got to give the sled dogs, the sled dogs are being pulled by a Land Rover.
ANN FUDGE, CEO, YOUNG & RUBICAM BRANDS: It's action, it's about adventure.
LISOVICZ: If you spend the day with Ann Fudge, you'll think she's worked in an ad agency her life.
FUDGE: Colgate Palmolive is one of our clients.
LISOVICZ: She gets excited by images.
FUDGE: I love the work that we're doing for Scrabble.
LISOVICZ: She talks about the power of advertising. FUDGE: We can use those messages to influence in many, many positive ways.
LISOVICZ: You're an optimist. But Ann Fudge is actually the new kid on Madison Avenue. Eighteen months ago she became CEO of Young & Rubicam, a company in need of new leadership and new energy.
You came to this job without any hands-on agency experience. Why would a woman with your pedigree, who could pick and choose her job, take that kind of risk?
FUDGE: I'm a risk taker, pure and simple. Building this company and taking it into a new direction. It was a challenge that I simply could not pass up. I like being sort of the challenger brand. I mean, that's been what I've done a lot of my career, rebuilding brands.
LISOVICZ: Since graduating from Harvard Business School in 1977, Fudge has climbed to the executive ladder as a marketing wizard, reviving brands at General Mills, General Foods and later, Kraft. When Kool-Aid wasn't so cool anymore, Fudge spearheaded a new blue flavor to attracts kids again. And when Maxwell House stopped percolating, she revived the old slogan "good to the last drop," adding flavored coffees to the mix. But the road to success was anything but inevitable for Fudge. She says her family played a crucial role. Can you share with us any life lessons about what your parents instilled in you at an early age?
FUDGE: The one thing that a parent can instill most in a child is to know that they are loved and capable of doing anything. To give that message to a young girl, growing up in Washington, D.C. in the '50s, which was very segregated at a time of the whole civil rights movement, and for me to sort of begin to see all of that transpire and evolve right before my eyes, took very strong and caring parents and extended family network.
LISOVICZ: At the height of her career in 2000, when she was heading up Kraft's $5 billion food and beverage division, Fudge took another risk. You quit. You weren't pushed. You were at the top of your game. Were people just shocked?
FUDGE: Yeah, I think there were a few open mouths along the way. I thought about it for several years. I think people have things that are sort of tipping points in their lives. Mine was the passing of my mom and sort of really understanding the importance of living and fully living and not missing anything because the next day or the next moment isn't guaranteed.
LISOVICZ: During her two-year break, Fudge spent time with her family, biked in Europe and got more involved in a charity she's passionate about. But one day she got a phone call from Sir Martin Sorrell (ph), the CEO of WPP, a U.K.-based media holding company. Sorrell had bought Young & Rubicam in 2000 for $4.7 billion, but it was struggling after a series of setbacks.
The agency had always been known as the creative hothouse of the ad world. It gave Snoopy to Metlife, made Jello Bill Cosby's favorite treat and wrote those jingles for Dr Pepper. But the agency was losing its edge. Some of its biggest clients defected in 2000, including Kraft, United Airlines and Kentucky Fried Chicken. U.S. revenues plunged from $439 million in 2000 to $191 million in 2002, a 55 percent drop, according to estimates by "Advertising Age." Sorrell needed someone to come in and breathe new life into the company. He turned to Fudge.
At this particular juncture for Y&R, are you a CEO or are you a paramedic?
FUDGE: I'm a probably a combination of both in some ways. But it's interesting. When you have great people to work with, that is really the basis for any sort of bringing a company back to its strength and its power.
LISOVICZ: Were you surprised at all when there was some professional sniping published?
FUDGE: Absolutely not.
LISOVICZ: How could a woman who rides a bike for months have that fire in the belly to run a company 24/7?
FUDGE: I'm doing it. That's all I can say and the truth of the matter is, you're always going to have people who question you. I've had people question me throughout my life, even from day one, starting my job with two children and somebody saying how do you expect this job, having two young children? And I said just watch me.
CATHY BLACK, PRES., HEARST MAGAZINES: I think that her values are right. I think her sense of ethics are right. I think for this moment, for where the world is today, where this country is today, I think those are assets that should have a very high value as well and I think Ann is a great leader in that way.
LISOVICZ: Some have questioned Fudge's potential because she's an agency outsider, but analysts say her 20-plus years on the client side is a great asset.
MICHAEL NATHANSON, SANFORD C. BERNSTEIN: The benefit that she brings to a company is understanding how people make decisions. The advantage is thinking like your client, which very few people in the agency business actually can say they do.
LISOVICZ: Fudge says she's rallying the troops.
FUDGE: I think the biggest thing is helping our people believe again, help people understand what we need to do and where our focus is and saying that truly, we're going to be a client centric business.
LISOVICZ: Fudge's vision is to turn Young & Rubicam into a one- stop shop for its clients. So how is Fudge doing so far? She's had a few big wins on her watch recently, a $250 million account for Microsoft, a $45 million account from Weight Watchers. But Burger King just took it's $350 million business away in less than one year. Fudge knows there's still work to be done.
FUDGE: Change isn't easy, but with a plan and with focus and with time, you better believe I am absolutely confident that all of the skeptics will eat their words.
LISOVICZ: When we come back, India with an American accent. Find out how Vivek Paul changed the U.S. call center business from a long way off.
And from rap to riches, see how Sean Combs built an empire that only starts in the studio.
LISOVICZ: Next time you're calling a bank or an airline, you might find one of Vivek Paul's employees on the other end of the phone. He's revolutionizing American business all the way from India. JJ Ramberg has more.
JJ RAMBURG, CNN CORRESPONDENT (voice-over): It's evening in Bangalor(ph), India, but the day is just beginning for throngs of employees at Wipro Technologies. On the other side of the world, it's morning in Mountain View, California, where their boss, Vivek Paul, is keeping tabs on their progress. Paul is the president of Wipro and he is changing the way the world does business. Acting as a virtual back office to hundreds of corporations from Nokia to Microsoft, Wipro is bringing jobs from around the world to its headquarters in India. How much cheap is it to work with a company in India than it would be to work with a company in the U.S.?
VIVEK PAUL, PRESIDENT, WIPRO TECHNOLOGIES: About 35 to 40 percent. How many times do you get something that works better and costs less?
RAMBURG: Software programming and call centers are the core of the business, but under Paul's guidance, Wipro has tapped into everything from mortgage processing to reading mammograms.
JOHN THAIN, CEO, NEW YORK STOCK EXCHANGE: I think Vivek's greatest skill is his vision and his drive to globalize the company and really to expand its horizon.
PAUL: India has no choice but to dramatically industrialize an inflated domestic economy.
RAMBURG: What makes Wipro's rapid growth possible is India's highly educated English speaking labor force. With classes in diction and slang, lessons in American manners, Paul is training his employees to work seamlessly across cultural boundaries.
PAUL: We have actually had training on using a knife and a fork, because many of the kids that come on board may be coming from rural India.
RAMBURG: Its employees not only speak impeccable English, they also use American names. In just five years, Paul's grown the company from $150 million to $1.5 billion in revenue. An army of workers, 33,000 of them, keep operations going 24 hours a day to service time zones across the world.
THAIN: They're very customer oriented. They really want to help us solve our problems and they want to do it on a very cost efficient, but a very high quality basis.
RAMBURG: The company has provided tremendous opportunities for a whole generation whose salaries far outpace the average Indian income of less than $500 a year. But Wipro's success in India has come at a cost to the United States. Many Americans are furious that their jobs have gone overseas.
DAVID KIRKPATRICK, SENIOR EDITOR, FORTUNE MAGAZINE: This is an issue filled with vitriol. There are an astonishing number of workers who rightly or wrongly believe themselves to have lost their jobs because of this phenomenon and they are extremely vocal.
RAMBURG: The issue was front and center throughout the presidential campaign.
SEN. JOHN KERRY (D) MASS: What I think we ought to be doing in America is not asking the American taxpayer to subsidize and reward a company that decides to take the jobs overseas. I think we ought to be rewarding the companies that keep the jobs and create them here in America.
RAMBURG: Why do you find that some of your clients won't let you talk about who they are?
PAUL: Over the last year and a half we have been through what I would call a turbulent time from the media side in terms of people viewing whether this is a good thing or a bad thing and is it something that helps America or hurts America?
RAMBURG: As the public face of Wipro, Paul is at the nexus of this fiery debate but he projects full confidence when making his case.
PAUL: As the baby boomers go into retirement, the United States is actually going to face a serious shortage of workers. For the United States to maintain its economic primacy, it needs to be able to tap into working populations around the world. And we've just opened that tap. We've given that conduit.
RAMBURG: Do you feel responsibility as a CEO of a company that is bringing a lot of jobs from America to India to do anything in America to help the people who are losing their jobs?
PAUL: I think that it would be presumptuous for me to think that. However, what I can do is from our perspective, continue to say very clearly that we are no different than, you know, the people who invented the power loom. Ultimately, it will change (INAUDIBLE). Let's figure out how you work around it. No different than the ATM that came out. Ultimately, it will reduce the demand for bank clerks, but that doesn't mean bank clerks will go unemployed.
RAMBURG: Paul's smooth sales pitch on behalf of India comes from years of living and working in America. Born and raised in Bombay and New Delhi, he came to the United States for business school at the age of 21.
PAUL: I was staying in the dorm and I went to the cafeteria. I was amazed. There was unlimited food, unlimited quantities of food, unlimited Pepsi, unlimited ice creams. I'm like wow! This is paradise on earth. They were right. The U.S. is the land of milk and honey.
RAMBURG: He learned American management style, working his way up the ranks at Pepsi, (INAUDIBLE) and GE. In 1999 he was running GE's CD scanning unit, when he was tapped by (INAUDIBLE) the chairman of Wipro.
PAUL: As Azim (ph) said, when you're a successful GE manager, you're just one more successful GE manager. But if you build this, it will be a one of a kind.
RAMBURG: Inspired by the challenge, Paul came on board but his first key decision was not to move to India. He lives and works in Silicon Valley, close to the majority of his clients.
KIRKPATRICK: Vivek, because he's both an American and someone who grew up in India, has a brilliant ability to keep one foot in each camp. He knows how American executives think and he can bring to them the Indian opportunities in their own language very eloquently and very effectively, which is why Wipro has grown so rapidly.
RAMBURG: Do you think of yourself as more Indian or more American?
PAUL: When I'm in India I think I'm American. When I'm in America, I think I'm an Indian.
RAMBURG: Paul is a CEO on the move. He spends about a third of his time in India, a third seeing clients and the rest in California. He makes a point of traveling as a self-reliant CEO rejecting the perks that could come with his position.
When he's home in Silicon Valley, he stays close to his roots, playing bridge once a month with a group of friends from India. For Vivek Paul, the world is already borderless. His challenge now is to convince businesses they can be too.
LISOVICZ: Coming up after the break, on the mike and on the record. Find out how Sean Combs, better known as P. Diddy, turned his creativity into cash.
(COMMERCIAL BREAK) LISOVICZ: Plenty of rap artists talk about the high life, but only a few get to actually live it. Sean Combs made it by using his hip-hop credentials as the foundation for a business that just keeps growing bigger. Here's JJ Ramberg again with the story of a bad boy who is making good.
JJ RAMBURG, CNN CORRESPONDENT (voice-over): He makes music. He dictates style. He moves between the inner city and the inner circle. Sean Combs, AKA, P. Diddy has not only brought hip-hop into the mainstream, he's transformed it into a $300 million global business, Bad Boy Worldwide Entertainment.
SEAN COMBS, BAD BOY WORLDWIDE ENT. GRP: So many people didn't respect the buying power of young America, of the hip-hop generation. And, you know, that's where I come from.
RAMBURG: Harlem born and raised, Combs worked his way to the top of the music world, producing hit artists like Mary J. Blige and Notorious B.I.G.
CARSON DALY, HOST, LAST CALL: Great year, great producer, great vision, incredible talent wrangler, sees potential in somebody and brings out the best in them.
RAMBURG: He became a star in his own right, winning two Grammy's for his debut album "No Way Out." Music became a springboard to venture into other businesses.
COMBS: I never allowed myself to be put into a box as just a hip- hop artist. I always wanted to make sure that not just thinking out of the box, that I just, you know, really literally just blew the box up and did what I wanted to do.
RAMBURG: What he wanted to do was to open restaurants, produce a television series and start an advertising and marketing company.
DALY: Puffy wants to take over the world. His work ethic will enable him to take his vision to fruition. I would -- you can bet the farm on that. The guy will not stop.
RAMBURG: In just 10 years, his business has become an international powerhouse. Nowhere is this more evident than in his apparel company, Sean John, which he started in 1999.
WENDELL BROWN, FASHION EDITOR, ESQUIRE MAGAZINE: He was definitely one of the first to recognize that just because you don't have $3,000 to spend on a suit or $800 to spend on a sweater, it doesn't mean you don't still love that look.
COMBS: Sean John is set up to be this generation's Ralph Lauren. It's a life style label.
RAMBURG: And a lucrative one at that, with sales of a reported $200 million a year. PETER ARNOLD, EXECUTIVE DIRECTOR, CFDA: I think Sean's success has a designer speaks to his absolute commitment to whatever he takes to heart that he wants to do and succeed in. He brings to that anything that he pursues, a discipline and a passion and an absolute desire to succeed and kind of an inherent understanding that he will.
RAMBURG: Sean John has gotten critical acclaim. This year, Combs won the prestigious CFDA award for fashion designer of the year. He also opened a flagship store on New York's Fifth Avenue and nobody is better at promoting the Sean John label than Combs himself. He's a regular on the red carpet and known for his lavish parties and glamorous life style.
BROWN: He's promoting a life style that's exciting and is about travel and sophistication and sort of being a man of the world.
RAMBURG: But behind the fancy cars and showy jewels is a guy who realizes that with notoriety comes responsibility. Do you worry at all that the image that you portray with all of this glitz and diamonds, is promoting an image that a lot of people, for whom you are a role model, won't ever being able achieve?
COMBS: I had to really assess that, you know in the last three years. The images that I was putting out there, whether it was jewelry or whether it was my personal style and how that was -- what pressure that was maybe giving a young man or a young woman. I have made sure that I put balance in my image by letting people know what's really important to me. What's important to me is giving back.
RAMBURG: Combs gives back through his charity, Daddy's House, which creates and funds programs for inner city youth. Having grown up in the inner city himself, he recognizes the obstacles that many kids face.
COMBS: One of the things that I try to attack in my community is the doubt that young men and women have about their futures and I try to inspire them to think outside of what society has planned for them.
RAMBURG: In 2003, Combs ran the New York City marathon, raising $2 million for children's causes.
COMBS: That was one of the craziest things I've ever done. I almost killed myself. So I'm happy to be here today.
RAMBURG: Despite his good deeds, Combs still fights the stigma that lingers from scandals in his past, the most highly publicized was his trial for weapons possession at the scene of a shooting incident in New York, for which he was acquitted.
Do you struggle at all without living or erasing your old image of the past as a sort of bad boy?
COMBS: We all evolve you know. We all evolve. We learn from our mistakes and we grow up to be men and grow up to be women and we try to teach other people about mistakes we made so they don't have to make the same ones. RAMBURG: This past year, Combs moved into the political arena, founding Citizen Change, a splashy effort to get out the youth vote.
DALY: He has millions and millions of people that when he puts on a jacket, they go buy it. He has tremendous influence, tremendous power and I think he really just organically wanted to try and turn that into some good.
COMBS: I want you to vote because you have the power to make a difference.
RAMBURG: You have your hand in so many pots. How do you stay on top of everything?
COMBS: I'm in love with what I do and I feel like that we have a limited amount of time here on earth and it's not about making money. It's about creating opportunities for other people. It's about inspiring a generation, inspiring your race. You know, and I feel like, that I've been blessed with that opportunity and I try to take advantage of it every day.
RAMBURG: What industry do you think you'll tackle next?
COMBS: Hollywood. I think that Hollywood's ready for a black James Bond and we can make some real, real, real dark shades. They going to be so dark that I'm going to walk around in a tuxedo all the time.
LISOVICZ: And that wraps up the special edition of global business influentials, a look at some of the people changing the corporate world and your world. Thanks for joining us. I'm Susan Lisovicz.
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